Notice of Removal — Womply v. Capital Plus Financial

Record facts

U.S. District Court for the Northern District of Texas, Dallas Division · No. 3:21-cv-02636-B · Doc. 1 · 2021-10-25 · Docket on CourtListener

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IN THE UNITED STATES DISTRICT COURT 
FOR THE NORTHERN DISTRICT OF TEXAS 
DALLAS DIVISION 
OTO ANALYTICS, INC. D/B/A WOMPLY, 
§
 
§ 
Plaintiff, 
§ 
§ 
v. 
§ 
CIVIL ACTION NO. 3:21-cv-2636 
§
CAPITAL PLUS FINANCIAL, LLC, 
§ 
CROSSROADS SYSTEMS, INC. AND 
§ 
ERIC DONNELLY, 
§ 
§ 
Defendants. 
§ 
DEFENDANTS’ NOTICE OF REMOVAL 
Defendants Capital Plus Financial, LLC, Crossroads Systems, Inc. (“Crossroads”), and 
Eric Donnelly (collectively “Capital Plus”), with a full reservation of rights, defenses, objections, 
and exceptions, hereby remove the above-captioned action from the 95th Judicial District, Dallas 
County, Texas, to the United States District Court for the Northern District of Texas.  In support 
of removal, defendants state: 
1.
On September 9, 2021, Plaintiff Oto Analytics, Inc. d/b/a Womply (“Womply”)
filed the state court action captioned Oto Analytics, Inc. d/b/a Womply v. Capital Plus Financial, 
LLC et al., Cause No. DC-21-13097, in the District Court of Dallas County, Texas, 95th Judicial 
District.  Ex. B-1. 
2.
Removal is timely.  Capital Plus Financial, LLC was served with a copy of
Womply’s Original Petition on September 23, 2021.  See Ex. B-7.  Other defendants were served 
after that date.  This notice is therefore timely filed because defendants are filing this notice of 
removal within the 30-day period required by 28 U.S.C. § 1446(b)(1).  See Fed. R. Civ. P. 
6(a)(1)(C). 
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3. 
Venue is proper.  The United States District Court of the Northern District of Texas, 
Dallas Division, is the district court “embracing the place where [this] action is pending.”  28 
U.S.C. § 1441(a). 
4. 
Removal is proper pursuant to both federal-question jurisdiction and the federal 
officer removal statute.  Although plaintiff asserts only state common law claims, the viability of 
each claim depends on interpretation of federal law—both statutory and regulatory—governing 
the Paycheck Protection Program (“PPP”).  Congress expressly prohibited plaintiffs like Womply 
from attempting to hold defendants like Capital Plus “responsible” for fees in the absence of a 
direct contractual relationship, which Womply admits does not exist.  15 U.S.C. 
§ 636(a)(36)(P)(ii).  Moreover, the governing statute and corresponding regulations both render 
illegal the contract plaintiff seeks to rely upon and strictly caps the fees payable to an entity like 
Womply—the validity of this underlying contract is an essential element of plaintiff’s fraud and 
tortious interference claims.  Finally, the lawsuit challenges the conduct of Capital Plus while it 
was acting under the “delegated” authority of SBA.  As a result, plaintiff’s claims—albeit facially 
raising only state law claims—implicate significant federal issues justifying removal under Grable 
& Sons Metal Products, Inc. v. Darue Engineering & Manufacturing, 545 U.S. 308, 312 (2005), 
and the federal officer removal statute.  
BACKGROUND 
5. 
This is a business dispute arising out of PPP.   
6. 
In 2020, the United States Congress authorized the Small Business Administration 
(“SBA”) to administer PPP to support small businesses during the COVID-19 pandemic.  Under 
PPP, private lenders make loans that are guaranteed by SBA.  To the extent the borrower uses the 
proceeds as required by the statutory and regulatory requirements, repayment of that portion of the 
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loan may be “forgiven,” triggering SBA’s guarantee—effectively meaning the federal government 
paid off that portion of the loan for the borrower.  SBA promulgates regulations and guidance for 
PPP and ensures compliance with PPP.  But many tasks related to the loans—finding borrowers, 
vetting borrowers, and making the loans—fall to the financial institutions that act as lenders.  
7. 
In 2020 and 2021, Capital Plus underwrote loans to borrowers under PPP.  Capital 
Plus is a Community Development Financial Institution (“CDFI”), which means it is dedicated to 
serving underserved markets and disinvested communities.  To facilitate its loan operation, in late 
2020, Capital Plus signed a Lender Service Provider Agreement (LSPA) with a company called 
Blueacorn, who agreed to handle some of the underwriting and processing associated with certain 
PPP loans. 
8. 
Womply alleges that it is a California-based technology company that developed a 
platform allowing: (a) potential borrowers to apply for loans under PPP; (b) Womply to refer those 
potential borrowers to its partner lenders; and (c) those lenders to manage and track PPP loans they 
funded.  Pet. ¶ 26 (Ex. B-1). 
9. 
In early 2021, the expiration date for PPP was extended from March 31, 2021 to 
June 30, 2021.  The extension, however, was designed to get money to a narrower group of 
borrowers, namely those in underserved communities.  As a result, the extension allowed only 
CDFIs like Capital Plus and Minority Depository Institutions to make the loans.  
10. 
Upon information and belief, as the CDFI requirement became effective, Womply 
faced an issue:  it had compiled applications for approximately 140,000 potential borrowers but 
had not yet referred these borrowers to a lender.  Womply approached Blueacorn in May 2021 
with the possibility of referring the borrowers to Capital Plus—a qualifying CDFI lender. 
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11. 
Womply claims that Blueacorn proposed a business relationship where Womply 
would refer loans to Capital Plus but would have no contractual relationship with Capital Plus.  
Pet. ¶ 27 (Ex. B-1).  Instead, Blueacorn would act as some sort of middleman and agree to pay 
Womply a portion of the fees that Blueacorn would receive from Capital Plus.  Id.  Capital Plus 
was not involved in these discussions.   
12. 
Womply claims that it was hesitant to enter into the agreement with Blueacorn 
without certain assurances from Capital Plus that Blueacorn would receive the fees to pay 
Womply.  Pet. ¶ 28 (Ex. B-1).  Womply claims that in response to Womply’s concerns, Capital 
Plus represented any fees paid by SBA would be deposited into an account owned jointly by 
Capital Plus and Blueacorn.  Id. ¶ 29.  In other words, Womply claims that Capital Plus represented 
SBA would simultaneously pay Blueacorn and Capital Plus.  This representation mattered—
according to Womply—because a few days later Womply signed contracts with Blueacorn that 
conditioned Blueacorn’s payment obligations to Womply on Blueacorn’s actual receipt of fees 
from Capital Plus.  Id. ¶ 32.    
13. 
Womply signed two contracts with Blueacorn.  Pet. ¶ 30 (Ex. B-1).  The contracts, 
which Womply incorporated by reference into its Petition, e.g., id. ¶ 31, are attached as Exhibit 
E.  Although purportedly two contracts—a “Referral Agreement” and an “Order Form”—the 
contracts substantively comprise a single agreement.  Both contracts require Womply to perform 
the same contractual obligations.  Referral Agreement § 1.2 (Ex. E at 2) (requiring Womply to 
conduct a review process in completing applications of prospective borrowers described in Exhibit 
A to the Referral Agreement); Order Form Description of “Service” (Ex. E at 10) (listing the same 
items covered by Exhibit A to the Referral Agreement); Order Form Add’l Terms & Conditions 
§ 2.1 (Ex. E at 11) (“Section 1.2 of the Referral Agreement is hereby incorporated by reference.”).  
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The actual service that Womply was providing was preparing and reviewing applications by 
potential borrowers for referral.  See, e.g., Referral Agreement Ex. A (Ex. E at 6) (describing the 
steps that Womply was required to perform to prepare and review an application before sending 
to Blueacorn).   
14. 
While both contracts purportedly require payment of two distinct fees—a “Referral 
Fee” and a so-called “Technology Fee”—this is just a façade.  The calculation for the Technology 
Fee eliminates the Referral Fee, so that Blueacorn really owes Womply the Technology Fee 
amount.  Order Form Add’l Terms & Conditions § 3.4 (Ex. E at 12).  In effect, the contracts purport 
to entitle Womply to at least 40% of lender fees paid by SBA on a particular loan.  Id.1 
15. 
Finally, each contract expressly says that it is “subject to All Applicable Laws, 
including SBA Regulations,” which in turn is defined to include all federal statutes and SBA 
Regulations governing PPP.  Referral Agreement § 9 (Ex. E at 4); Order Form Add’l Terms & 
Conditions § 9 (Ex. E at 14). 
16. 
Because Capital Plus has not paid Blueacorn the fees that Womply claims are due 
under these contracts, Womply sued Capital Plus for (1) fraudulent inducement of Womply to 
enter into the Blueacorn contracts, (2) tortious interference with the Blueacorn contracts, 
(3) conversion, and (4) unjust enrichment. 
 
1 The Technology Fee consists of $250 per loan plus one-third of all fees (minus the $250) paid 
by SBA on a particular loan, which for the loans in question was $2500 or less.  The Referral Fee 
was netted out, so it did not change this preceding math.  As a result, on a loan with a $2,500 fee, 
the Technology Fee would equal $999.99 or 40% of the fees paid by SBA to Capital Plus.  For 
those loans with fees less than $2,500, the Technology Fee would exceed 40% of the fees paid by 
SBA to Capital Plus. 
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REMOVAL IS PROPER UNDER FEDERAL QUESTION JURISDICTION 
17. 
Removal is proper because Womply’s suit involves a federal question.  28 U.S.C. 
§§ 1331, 1441(a). 
18. 
“[I]n certain cases federal-question jurisdiction will lie over state-law claims that 
implicate significant federal issues,” even where only state-law claims are cited in a complaint.  
Grable, 545 U.S. at 312.  “[F]ederal jurisdiction over a state law claim will lie if a federal issue is: 
(1) necessarily raised, (2) actually disputed, (3) substantial, and (4) capable of resolution in federal 
court without disrupting the federal-state balance approved by Congress.”  Gunn v. Minton, 568 
U.S. 251, 258 (2013). 
19. 
Here, all four requirements are satisfied, and the Court has federal-question 
jurisdiction over all Womply’s claims because they seek to hold Capital Plus “responsible” for 
Womply’s fees in violation of a clear federal statute, and over Womply’s fraud and tortious 
interference claims because to establish key elements of each, Womply must show its contract 
with Blueacorn complied with federal law.  
20. 
To the extent any of Womply’s claims do not involve a federal question, this Court 
has supplemental jurisdiction over those claims under 28 U.S.C. § 1367.2   
Womply’s Claims Arise Under Federal Law. 
21. 
All four factors of the Grable inquiry are satisfied by Womply’s claims. 
A. Womply’s Claims Necessarily Raise Federal Issues. 
22. 
The entire point of Womply’s lawsuit is to hold Capital Plus liable for fees under 
PPP.  On December 27, 2020, Congress passed the Economic Aid Act which extended PPP.  
 
2 The claims are thus all removable.  But even if any of Womply’s claims were nonremovable, so 
long as Womply’s suit involves at least one federal-question claim, the entire action could be 
removed.  See 28 U.S.C. § 1441(c)(1).  Then, after removal, the Court would sever the 
nonremovable claim and remand it to state court.  See 28 U.S.C. § 1441(c)(2). 
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Among other things, the statute also addressed payments to “agents” in connection with PPP; 
“agents” is a broad term under the relevant implementing regulations that essentially covers 
anyone acting in any sort of representative capacity.  13 C.F.R. § 103.1(a) (“Agent means an 
authorized representative, including . . .  any other person representing an Applicant or Participant 
by conducting business with SBA.”) & id. § 103.1(b) (“The term conduct business with SBA 
means: (1) Preparing or submitting on behalf of an applicant an application for financial assistance 
of any kind . . . ; (2) Preparing or processing on behalf of a lender or a participant in any of SBA’s 
programs an application for federal financial assistance . . . .”).  Here, Womply helped all the 
borrowers complete their applications, including collecting supporting information, and then 
referred the loans to Capital Plus.  Womply was, therefore, categorically acting as an “agent” for 
purposes of PPP. 
23. 
With regard to agent fees, the statute prohibits “agent[s] that assist[] an eligible 
recipient to prepare an application for a covered loan” from collecting a fee in excess of limits set 
by SBA.  15 U.S.C. § 636(a)(36)(P)(iii).  The statute also provides that a lender like Capital Plus 
shall not be “responsible” for paying fees to an agent, like Womply, with whom it does not directly 
contract:  “A lender shall only be responsible for paying fees to an agent for services for which 
the lender directly contracts with the agent.”  Id. (emphases added).  During 2020, many purported 
agents attempted to recover against lenders for payment fees on various legal theories even though 
the purported agents had no contract with the respective lenders.  See, e.g., Juan Antonio Sanchez, 
PC v. Bank of South Texas, 494 F. Supp. 3d 421 (S.D. Tex. 2020).  These claims were universally 
rejected, e.g., id. at 434, and in an amendment to the statute in late 2020, Congress added the 
“directly contracts” language, presumably to foreclose such suits.  Consol. Appropriations Act, 
2021, Pub. L. No. 116-260, § 340, 134 Stat. 1182, 2050. 
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24. 
It is undisputed that Capital Plus did not contract directly with Womply for any 
services.  Womply’s lawsuit unambiguously alleges that was precisely what Womply wanted to 
achieve:  Womply alleges that from the outset, the idea was that “Womply would contract only 
with Blueacorn” and that “Capital Plus would have no contractual obligation to pay Womply for 
the referral and technology services it provided.”  Pet. ¶¶ 27 & 28 (Ex. B-1).  Yet now Womply 
seeks to hold Capital Plus “responsible” for agent fees.  Each of Womply’s claims seeks as relief 
that Capital Plus be held responsible for $76 million of such fees in direct contravention of federal 
law.  Id. ¶¶ 72, 78, 81, 87 & Prayer for Relief. 
25. 
As outlined below, it is no accident that Womply did not ask Capital Plus for a 
direct contractual relationship; Womply was trying to evade caps on fees collected from lenders 
like Capital Plus by not contracting with Capital Plus.  Womply’s scheme was too cute because it 
overlooked the statutory protection afforded lenders against claims like Womply’s. 
26. 
In addition to the above federal question, both Womply’s tortious interference and 
fraudulent inducement claims share a necessary element: a valid underlying contract—i.e., that 
Womply’s contracts with Blueacorn are legal under federal law.  “To establish a claim for tortious 
interference with a contract, a plaintiff must establish: (1) the existence of a valid contract subject 
to interference; (2) that the defendant willfully and intentionally interfered with the contract; 
(3) that the interference proximately caused the plaintiff’s injury; and (4) that the plaintiff incurred 
actual damage or loss.”  Cmty. Health Sys. Prof’l Servs. Corp. v. Hansen, 525 S.W.3d 671, 689 
(Tex. 2017).  To prove “existence of a valid contract” (element one), Womply would have to show 
the Blueacorn contracts are legally valid and enforceable.  To satisfy proximate causation and 
actual loss (the third and fourth elements), Womply would have to show that Blueacorn could 
perform the contracts and breached.  Amigo Broad. LP v. Spanish Broad. Sys., Inc., 521 F.3d 472, 
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493 (5th Cir. 2008) (“To establish proximate cause, a party must show that ‘the defendant took an 
active part in persuading a party to a contract to breach it.’”). 
27. 
To prevail on a fraud claim, “a plaintiff must show that: (1) the defendant made a 
false, material representation; (2) the defendant knew the representation was false or made it 
recklessly as a positive assertion without any knowledge of its truth; (3) the defendant intended to 
induce the plaintiff to act upon the representation; and (4) the plaintiff justifiably relied on the 
representation, which caused the plaintiff injury.”  Barrow-Shaver Res. Co. v. Carrizo Oil & Gas, 
Inc., 590 S.W.3d 471, 496 (Tex. 2019), reh’g denied (Jan. 17, 2020) (internal quotation marks and 
citations omitted).  Because Womply’s claimed injury is loss of fees under the Blueacorn contract, 
Womply must show that it could have been paid those fees without violating federal law.  
Villanueva v. Gonzalez, 123 S.W.3d 461, 468 (Tex. App.—San Antonio 2003, no pet.) (“Gonzalez 
moved for judgment notwithstanding the verdict, in part, on the basis that Villanueva could not 
recover lost profits on his fraud or fraudulent inducement claim because he did not have an 
otherwise enforceable contract on which to predicate such an award.  . . .  Here, the contract 
claimed by Villanueva is unenforceable because it is illegal.  Therefore, his fraud claim to recover 
the benefit of an unenforceable bargain cannot stand.”).  As well, Womply cannot establish the 
element of reasonable reliance; Womply claims it relied on alleged statements that if actually made 
(Defendants deny this) would be manifestly false because the governing SBA rules clearly prohibit 
what Womply claims was represented, and Womply is presumed to know the law. 
28. 
As explained below, the Womply–Blueacorn contracts as written violate federal 
law because the provided fee structure would exceed a clear regulatory cap.  Alternatively, the 
contracts, which say they are subject to SBA regulations, must be construed not to require 
Blueacorn to violate these regulations by making the payments Womply seeks; as a result, 
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Blueacorn did not breach the contracts by failing to pay Womply, so there was no injury 
attributable to an alleged interference or fraud by Capital Plus.  If correct as a matter of federal 
law, Womply cannot satisfy its affirmative burden on either the tortious interference or fraudulent 
inducement claims. 
29. 
Given the clear statutory command making lenders responsible for fees only if a 
direct contract exists as outlined above, one might wonder why Womply would not have sought 
to contract directly with Capital Plus?  The answer is that Womply sought to evade limits on the 
size of the fees it could collect.  The Blueacorn contracts clearly call for payment of fees in 
violation of the relevant SBA regulations.   
30. 
To implement the Economic Aid Act, SBA issued regulations setting limits on the 
fees that agents acting in the capacity Womply was acting could collect.  On January 14, 2021, 
SBA issued an Interim Final Rule governing the Paycheck Protection Program as Amended by the 
Economic Aid Act.  86 Fed. Reg. 3692 (Jan. 14, 2021).  With regard to agent fees, the regulation 
provides: 
A lender is only responsible for paying fees to an agent for services for which the 
lender directly contracts with the agent.  The total amount that an agent may collect 
from the lender for assistance in preparing an application for a PPP loan (including 
referral to the lender) may not exceed:  
a. One (1) percent for loans of not more than $350,000;  
b. 0.50 percent for loans of more than $350,000 and less than $2 million;
 
and  
c. 0.25 percent for loans of at least $2 million. 
 
Id. at 3709.  All the loans at issue were relatively small loans—almost all well under $25,000.  As 
a result, an agent could not collect more than $250 as the capped fee amount of 1% of the amount 
of the loan.  SBA, however, generally paid the lender $2,500 in fees for such loans—unless the 
loan was for less than $5,000, in which case the fee was 50% of the loan amount.  Id. at 3708.  As 
result, the cap meant that for loans of less than $25,000, an agent could receive no more than 10% 
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of the SBA fee ($250 out of $2,500) and even less for smaller loans.  As noted above, Womply’s 
contracts with Blueacorn purport to give Womply a minimum of 40% of the SBA fees. 
31. 
Apparently, Womply believed that by contracting with Blueacorn instead of Capital 
Plus, Womply could circumvent the SBA fee caps.  Womply apparently contends that SBA only 
set caps on fees paid by “lenders” and Blueacorn is not a lender.  This ignores the regulatory 
language.  The regulation governs “the total amount that an agent may collect from the lender . . . .”  
86 Fed. Reg. 3709.  Under the Blueacorn contract, Blueacorn’s payment obligation to Womply is 
expressly dependent on payment of fees from Capital Plus; thus, the express source of the fees 
Womply would “collect” is Capital Plus, the lender.  Referral Agreement § 2.3 (Ex. E at 2) 
(“Within five (5) days after Blueacorn receives its fees from the lender . . . Blueacorn will pay 
Womply . . . .”); Order Form Add’l Terms & Conditions § 3.5 (Ex. E at 12) (same).  Womply’s 
position that the fees were not collected from a lender is made even worse if one credits Womply’s 
claim that the fees were supposed to come directly from an account jointly owned by Capital 
Plus—the lender.  Even if the language did not foreclose Womply’s effort at evasion, it would 
make no sense to construe the regulation to cap fees if the payment was made via a check from the 
lender to the agent but not to cap the fees if the lender first gave the money to a third-party that in 
turn paid the agent. 
32. 
Womply may also attempt to claim that the cap does not apply because it was doing 
more than referring loans to Capital Plus; it was providing a “platform.”  Pet. ¶ 26 (Ex. B-1).  But 
this position would ignore both the language of the regulation and the language of Womply’s 
contracts.  The cap applies to any fees collected by an agent from a lender “for assistance in 
preparing an application for a PPP loan (including referral to the lender).”  86 Fed. Reg. 3709.  
Despite Womply’s effort to dress up its fees under the label “Technology Fees,” the actual 
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contractual performance required by the contracts—and for which Womply alleges it is entitled to 
compensation—consists of completing and reviewing borrower applications and referring the 
loans to Capital Plus.  See supra paras. 13, 14.  Moreover, any additional services Womply 
provided would constitute “assistance in preparing an application for a PPP loan (including referral 
to the lender).”  Given the stage in the process when Womply contracted with Blueacorn (Womply 
apparently had received information from 140,000 potential borrowers) and given that Womply is 
not a lender, the only service Womply could offer was assistance in completing the applications 
and referring them to Capital Plus.   
33. 
 Additionally, Womply cannot establish the element of reasonable reliance 
necessary to sustain a fraud claim because as a matter of law Womply is charged with knowing 
federal law which directly prohibits the payment set-up Womply claimed it reasonably believed 
existed.  Specifically, Womply claims that Capital Plus represented that Blueacorn and Capital 
Plus held a “joint account” in which all fees received from SBA “were deposited directly.”  Pet. 
¶ 29 (Ex. B-1).  Womply claims that this representation allayed its concern that “Blueacorn may 
default on its contractual obligations if Capital Plus chose not to compensate Blueacorn.”  Id. ¶ 28.  
In other words, if SBA deposited the fees into an account owned in part by Blueacorn, Capital Plus 
(with which Womply had no contractual relationship) would not have unilateral control over the 
fees, so Blueacorn could pay Womply under their contracts.  Womply claims that it was in reliance 
on this representation that Womply entered into the Blueacorn contracts that made payment to 
Womply contingent on Blueacorn’s receipt of fees from Capital Plus. 
34. 
Under Texas law, a party is presumed to know the law.  Steward v. Tex. Lottery 
Comm’n, 975 S.W.2d 732 (Tex. App.—Corpus Christi 1998, no pet.).  The fact allegedly 
represented by Capital Plus—that SBA paid fees into an account owned in part by Blueacorn—
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runs directly counter to federal law.  SBA has instructed lenders that the account into which loan 
fees will be deposited must be “owned by the Lender” and that SBA will not pay third-parties 
acting on behalf of lenders, such as Lender Service Providers.  See SBA, SBA Procedural Notice 
Control No. 5000-20091, Second Updated Paycheck Protection Program Lender Processing Fee 
Payment & 1502 Reporting Process (Feb. 8, 2021) (emphasis added) (“SBA will not make any 
payments to LSPs [Lender Service Providers]”).  Given the legal presumption that Womply knew 
about this regulation, Womply cannot establish justifiable reliance to recover for fraud.  Barrow-
Shaver Res. Co., 590 S.W.3d at 497. 
B. The Federal Issues Raised by Womply’s Tortious Interference and Fraud Claims 
Are Actually Disputed. 
35. 
The first Grable element—that the federal issues are actually disputed—is easily 
satisfied.  Womply’s lawsuit makes no sense whatsoever unless Womply has some different 
understanding of the meaning or application of the federal laws and statutes cited above. 
C. The Federal Issues Raised by Womply’s Claims Are Substantial. 
36. 
“The substantiality inquiry under Grable looks [] to the importance of the issue to 
the federal system as a whole.”  Gunn, 568 U.S. at 260.  “The Supreme Court has suggested that 
an issue can be important for many reasons: because state adjudication would undermine the 
development of a uniform body of federal law; because the case presents a nearly pure issue of 
law that would have applications to other federal cases; or because resolution of the issue has broad 
significance for the federal government.”  Bd. of Comm’rs of Se. La. Flood Prot. Auth.-E. v. Tenn. 
Gas Pipeline Co., L.L.C., 850 F.3d 714, 724 (5th Cir. 2017) (internal quotation marks and notes 
omitted) (collecting cases). 
37. 
PPP is a nationwide, federal program established under statute, implemented by 
regulations promulgated by SBA, funded by banks throughout the United States, and guaranteed 
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by SBA.  The Federal Government has invested almost one trillion dollars in PPP.  Under the 
authority given it by Congress, SBA has promulgated rules, regulations, and guidance intended to 
reduce the likelihood of fraud and maximize the achievement of PPP’s goals.  SBA has issued 
strict rules and regulations regarding the payment of fees to LSPs and agents who assist the bank 
making loans to borrowers.  For example, pursuant to Congressional command, SBA has placed 
limits on the “total amount that an agent may collect from the lender.”  86 Fed. Reg. 3709.  The 
Federal Government has a keen interest in making sure that PPP is carried out as required by the 
governing statutes and regulations. 
38. 
This issue has resounding effects for PPP.  First, Womply is currently engaged in 
litigation with various lenders over fees.  Although at least some of these cases are in confidential 
arbitrations, the issues in each are presumably similar.  According to published reports, Womply 
has received hundreds of millions in fees from PPP.  E.g., Stacy Cowley & Ella Koeze, How Two 
Start-Ups Reaped Billions in Fees on Small Business Relief Loans, Oct. 11, 2021, 
https://www.nytimes.com/2021/06/27/business/ppp-relief-loans-blueacorn-womply.html.  
Second, the claims at issue here involve PPP loans to almost 90,000 borrowers.  While these loans 
have been funded, not all the loans have been forgiven or repaid.  Capital Plus’s ability to service 
the loans and complete the PPP process could be impacted by how much of the loan fees (which 
along with minimal interest constitute the only compensation earned by a lender on these loans) it 
must pay to Womply.  Third, this case represents an attack on the supremacy of federal law; 
Womply is trying to use state common law to reach a result—holding Capital Plus responsible for 
fees in the absence of a direct contractual relationship—that Congress has prohibited.  
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D. The Federal Issues Raised by Womply’s Claims Are Capable of Resolution in 
Federal Court Without Disrupting the Federal-State Balance Approved by Congress. 
39. 
This case is suited for federal court.  Not only is there an “actually disputed and 
substantial” federal issue, but that issue has national effect. 
40. 
The meaning of PPP and the effects of SBA’s promulgated rules, regulations, and 
guidance are federal issues.  Leaving this case in state court could result in disparate interpretations 
of the meaning and effect of SBA’s pronouncements.  Further, given the scope and importance of 
PPP in the federal scheme to address the continuing COVID-19 pandemic, disparate interpretations 
of SBA’s guidelines could undermine PPP’s enforcement mechanisms. 
41. 
The federal government has a strong interest in the enforcement of its laws.  And 
this suit by Womply seeking to undermine SBA’s published rules, regulations, and guidance would 
undermine enforcement of the laws.  Therefore, this is a case warranting federal jurisdiction and 
that would not disrupt the federal-state balance approved by Congress. 
REMOVAL IS PROPER UNDER FEDERAL OFFICER REMOVAL STATUTE 
42. 
Removal is also proper under the federal officer removal statute, which provides 
for removal of any suit brought against “[t]he United States or any agency thereof or any officer 
(or any person acting under that officer) of the United States or of any agency thereof, in an official 
or individual capacity, for or relating to any act under color of such office . . . .”  28 U.S.C. 
§ 1442(a)(1).  “[S]ection 1442(a) permits an officer to remove a case even if no federal question 
is raised in the well-pleaded complaint, so long as the officer asserts a federal defense in the 
response.”  Latiolais v. Huntington Ingalls, Inc., 951 F.3d 286, 290 (5th Cir. 2020). 
43. 
“[T]o remove under section 1442(a), a defendant must show (1) it has asserted a 
colorable federal defense, (2) it is a ‘person’ within the meaning of the statute, (3) that has acted 
pursuant to a federal officer’s directions, and (4) the charged conduct is connected or associated 
Case 3:21-cv-02636-B     Document 1     Filed 10/25/21      Page 15 of 18     PageID 15

 
 
16 
with an act pursuant to a federal officer’s directions.”  Id. at 296.  “The Court has consistently 
urged courts to avoid ‘a narrow, grudging interpretation of § 1442(a)(1).’”  Id. at 290 (quoting 
Willingham v. Morgan, 395 U.S. 402, 405 (1969)).  Here, all four elements are met.   
44. 
First, Capital Plus is asserting a colorable federal defense.  In addition to the 
deficiencies in Womply’s affirmative case described above, Capital Plus has also invoked 
illegality and public policy as affirmative defenses to the petition, in part because Womply cannot 
seek by litigation to compel Capital Plus to pay an amount in violation of SBA regulations.  See 
generally Answer ¶¶ 3–12 (Ex. B-14).  The underlying contract that plaintiff claims was 
fraudulently induced and/or tortiously interfered with is illegal under federal law, which caps the 
fees payable to an entity like Womply.  The second and third elements are met because SBA has 
“delegated authority” to Capital Plus for the purpose of making PPP loans.  15 U.S.C. 
§ 636(a)(36)(F)(ii)(I) (“For purposes of making covered loans . . . a lender approved to make loans 
under this subsection shall be deemed to have been delegated authority by [SBA].”); see Bell v. 
Thornburg, 743 F.3d 84, 89 (5th Cir. 2014) (private citizens qualify for removal where they 
“receive delegated authority [and] do not merely comply with the law”).  Fourth, Womply’s claims 
are “connected or associated with” Capital Plus’s acts under color of federal office because 
Womply is seeking a share of fees from the loans Capital Plus has made under PPP.   
45. 
Therefore, this Court also has jurisdiction for this removed case under the federal 
officer removal statute. 
CONSENT OF ALL PROPERLY SERVED DEFENDANTS 
46. 
Under 28 U.S.C. § 1446(b)(2)(A), all defendants who are properly joined and 
served must join in or consent to removal if removal is based solely on § 1441(a).  Defendants 
Capital Plus Financial LLC, Crossroads, and Donnelly all join in and consent to removal. 
Case 3:21-cv-02636-B     Document 1     Filed 10/25/21      Page 16 of 18     PageID 16

 
 
17 
JURY DEMAND 
47. 
Womply demanded a jury in the state-court suit. 
LOCAL RULE 81.1 
48. 
Copies of all pleadings, process, orders, and other filings in the state-court suit are 
attached to this notice as required by 28 U.S.C. § 1446(a).   
49. 
Pursuant to Northern District of Texas Local Rule 81.1, defendants are attaching as 
Exhibits A–D the following: 
A. an index of all documents that clearly identifies each document and indicates the 
date the document was filed in state court;  
B. a copy of the docket sheet in the state court action; 
C. each document filed in the state court action; and  
D. a separately signed certificate of interested persons for each of the defendants. 
50. 
Further, defendants are submitting a cover sheet and supplemental cover sheet as 
required by this Court’s local rules. 
51. 
In addition, defendants will promptly file a copy of this notice of removal with the 
clerk of the Dallas County court where the suit has been pending. 
CONCLUSION 
52. 
Removal is timely and proper pursuant to federal-question jurisdiction and the 
federal officer removal statute, and defendants have satisfied all procedural requirements for 
removal. 
53. 
For these reasons, defendants ask the Court to remove the suit to the United States 
District Court for the Northern District of Texas. 
 
 
Case 3:21-cv-02636-B     Document 1     Filed 10/25/21      Page 17 of 18     PageID 17

 
 
18 
 
 
 
 
Respectfully submitted, 
 
 
 
 
 
 
/s/ Terrell W. Oxford 
 
 
 
 
 
 
Terrell W. Oxford 
 
 
 
 
 
State Bar No. 15390500 
 
 
 
 
Harry P. Susman (Attorney-in-Charge)  
 
 
 
 
 
(pro hac vice application pending) 
 
 
 
 
State Bar No. 24008875 
 
 
 
Megan Elise Griffith 
 
 
 
 
(application pending) 
 
 
 
 
State Bar No. 24122748 
 
 
 
SUSMAN GODFREY L.L.P. 
 
 
 
 
1000 Louisiana Street, Suite 5100 
 
 
 
 
Houston, Texas 77002-5096 
 
 
 
 
Telephone:  (713) 651-9366 
 
 
 
 
Fax:  (713) 654-6666 
 
 
 
 
toxford@susmangodfrey.com 
 
 
 
 
hsusman@susmangodfrey.com 
 
 
 
 
mgriffith@susmangodfrey.com 
 
 
 
 
 
Attorneys for Defendants Capital Plus  
 
 
 
 
Financial, LLC, Crossroads Systems, Inc.,  
 
 
 
 
and Eric Donnelly 
 
CERTIFICATE OF SERVICE 
 
 
This is to certify that a true and correct copy of the foregoing instrument has been served 
on the following counsel of record, this 25th day of October 2021, by using the electronic case 
filing system of the United States District Court for the District of Texas and by email on the 
following counsel: 
Alistair Dawson, adawson@beckredden.com 
Alexander L. Cheney, acheney@willkie.com 
Jennifer S. Maybee, jmaybee@willkie.com 
Casie M. Orellana, corellana@willkie.com 
 
 
 
 
 
 
/s/ Megan E. Griffith  
 
 
 
 
 
 
Megan E. Griffith 
Case 3:21-cv-02636-B     Document 1     Filed 10/25/21      Page 18 of 18     PageID 18

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